Two contractors submitted the following cost estimates for a proposed bridge:

Bridge A Bridge B

First Cost P20M P27M

Life 20 years 30 years

Salvage Value           P500,000           P750,000

Annual Upkeep        P160,000           P  50,000

Repairs P1.5M every 4 years P1M every 6 years

If interest is 7.5% compounded annually, which bridge is cheaper in terms of its capitalized cost? and by how much?

Answer rating: 100% (QA)

Bridge A XFirst Cost20000000 ANNUAL UPKEEP COST Uniform Series Present Worth FactorUSPWFPAiN1iN1i1iN ... View the full answer